"Schneider Electric utilizes business applications heavily in our software and cloud augmented products, intelligent hardware systems and solutions," said Alfons Marquez, Vice President Digital & Software Domain at Schneider Electric. "We are pleased to partner with Flexera Software and look forward to leveraging their considerable expertise in Software Monetization. Simplified licensing, faster provisioning, improved usage visibility, and the ability to propose the right solutions based on usage are just some of the capabilities we expect to be able to bring to our customers through the implementation of this suite."

In this rapidly changing market, Schneider Electric needed a Software Monetization solution that would give the company flexibility to quickly adapt and take advantage of new business opportunities such as the Internet of Things by standardizing software licensing, entitlement management and delivery onto a single, consolidated platform across its traditional and digital software business.

02/10/2015

A new survey report, The Third Industrial Revolution: Intelligent Devices, Software, and the Internet of Things, prepared jointly by Flexera Software and IDC, was published today to provide unique insights into how the third industrial revolution sweeping the global economy is being fueled by device manufacturers - transforming their products, business models and revenue streams with intelligent and Internet-connected technology. Device makers are rolling out software-driven, Internet-connected devices and leveraging software licensing and entitlement management to increase revenues and profits.

The report indicates that reality is catching up to the hype. Device manufacturers are significantly transforming their product and services lines through software-driven intelligent devices, Internet of Things devices and software licensing/entitlement management capabilities that enable monetization of products and services. Among the report's findings:

The number of internet of things makers will more than double within two years

Software-enabled intelligent devices continue strong growth

New product/services categories are being created

Software licensing/entitlement management is key to monetizing the internet of things

Proportion of revenues from hardware declining, proportion from services rising

"Hardware device makers are faced with a variety of challenges associated with thin margins, inflexible and costly supply chains, and limited revenue streams," said Amy Konary, Research Vice President - Software Licensing & Provisioning, IDC. "By transforming their business models via software, Internet connectivity and licensing capabilities, device makers can enter new markets, diversify and increase their revenue streams, improve margins, and differentiate from the competition. The survey data indicates that that is exactly what is happening now."

02/06/2015

Reverse engineering in the context of software engineering is the practice of analyzing the software and its system to extract the actual design information. There are legitimate reasons why an application might be reverse engineered, for example the original source code of a product that has been available for many years might be lost and the application producer needs to get it back to protect his intellectual property (IP). In this case, reverse engineering skills would be used by software engineers to recover and protect the IP of the company. Unfortunately, in most cases, reverse engineering tactics are being used by competitors to disclose IP and by hackers for malicious purposes such as piracy or distributing malware. As a result, application producers need to consider implementing an anti-reverse engineering strategy to prevent information disclosure, tampering and software piracy.

Following are some recommended best practices to thwart security hacks. First and foremost it is critical to apply the security in layers to provide maximum protection. Layers to consider include:

Anti-Analysis: Used to slow down reverse engineers (hackers) from analyzing and understanding the internal working of the software application. There are many anti-analysis techniques used, but the most common ones are encryption, compression and code obfuscation through permutation. There are advantages and disadvantages of each technique, however, all provide a common objective—make it difficult and confusing so that the hacker is wasting time and resources.

Integrity Validation: Identify which part(s) of the application have been modified. One of the most common integrity validation techniques implemented is via code checksum. The checksum calculation can range from simple to intricate checksum/hash algorithms. It is critical to ensure the integrity of the software has not been tampered.

Detection of Debuggers: Identify whether or not the software process is being debugged, or if a debugger is running in the system. Debugger detection techniques range from the very simple (and obvious) checks to more complex checks that deal with native APIs and kernel objects. There are many techniques but the most common techniques are:

Utilizing kernel objects to detect if debugger is attached to the process

Using debugger interrupts and exceptions to invalidate flags normally handled by debuggers and not by the software

Using timing checks to determine the time spent between several instructions, and if the time spent took longer compared to a normal run, it probably means that the process is being executed under a debugger

Implementing an anti-reverse engineering strategy which includes all of the above will provide maximum protection to slow down the reverse engineering, but of course, nothing will stop a skilled, informed and determined reverse engineer or hacker.

01/26/2015

The large scale adoption by the telco carriers of Network Function Virtualization (NFV) in the upcoming year presents many challenges to network equipment manufacturers who supply computing and network solutions to those carriers. The basic premise behind NFV is that it enables the large carriers to realize an expandable and elastic solution to the ever increasing capacity and performance needs of a large data center by replacing much of the physical hardware with virtualized network functions that run on blade servers. Functions such as security and routing are primarily software functions. This transformation has a dramatic effect on network equipment manufacturers who provide solutions to the large telco carriers – a business model and supply chain built upon building, selling and deploying physical hardware must be extended to enable the deployment of those products as virtual software or virtual appliances called virtualized network functions that run on blade servers.

Cracking the code of NFV business model transformation is reminiscent of how the Enigma-machine encrypted messages used by the Germans in WWWII were finally broken by the crypto analysis team at Bletchley Park (dramatized in the recent movie, “The Imitation Game”). The Bombe machine was spinning endlessly until it was realized a special code was needed to kick-start the analysis – a code that was found only after experience understanding the dynamics of human behavior.

For NFV, we have found that code after working closely with many network equipment manufacturers to help them to establish a roadmap and solution for deploying NFV within their business. Our secret code is simple, but far reaching consequence – we call our code The 3 P’s:

Price – deploying virtual appliances which are used in an elastic (vs static) deployment model requires hardware companies to understand the meaning of a “software license”, and how to properly monetize value through elasticity and capacity management. By defining the correct model to match the use case of the enterprise and telco carriers, new usage and capacity based meters and pricing are established.

Protection – by their very nature, a virtual appliance can be moved and copied. However, the intellectual property (IP) contained within a virtual network function must be protected such that it cannot be copied and used outside the bounds of the license rights. This can be very tricky, but we have found ways to help network equipment manufacturers protect their virtual network function IP, while enabling the virtual network functions to be flexibly deployed to enable the new pricing models described above.

Provision – most network equipment manufacturers have supply chains and infrastructure designed to deploy physical devices through a varied distribution channel. The selling of software-based virtual machines requires careful planning and design extensions to handle the needs of software and managing the associated software lifecycle to enable “on demand” deployment, customer self-service and maximizing recurring revenue.

01/22/2015

In this demonstration, Jim Berthold, Principal Solutions Engineer with Flexera Software discusses how software vendors and device manufacturers can reduce distribution and support costs with FlexNet Operations, an entitlement-based electronic software delivery solution. He demonstrates how vendors can improve the customer experience by providing immediate access to software purchased with a clean, easy to use interface. Vendors also benefit from immediate revenue recognition once the customer has been notified that they can access their software.

01/16/2015

Many application producers are extending their thought process from customer experience to customer success management. Customer experience focuses on keeping your users happy. While, customer success focuses on making sure customers benefit from the tools and/or services sold by you, the application producer. The focus extends from customer experience to customer success because application producers realize that while happy customers are important, they only affect your company’s bottom line by becoming repeat business.

Enterprises will expand their usage of your products, when they are successful using your products. To expand sales into other groups and sell additional features of existing products, users have to see value in the product, not just think it has a nice user interface or great support for power users. Generally, it is easier to get a new sale at an existing customer than to acquire a new customer because existing customers are proven users who have already bought into your tools.

The key to customer success management is to track and measure success. A typical way to track customer success is by asking the customer directly. While this is an important data point, it does not provide quantifiable data, which is important to get a complete picture of customer success. Interviewing the customer has another issue because you typically ask your champion. Most product champions do not know about product satisfaction across the whole company.

Companies also measure customer success by analyzing product purchases. The issue with this method of customer success analysis is it only tracks transactions, not actual usage. I have seen too many instances where customers were still licensing and renewing products due to a strong champion or executive sponsorship but people internally were not using the products with any frequency. This eventually leads to customers who decide not renew their maintenance or subscriptions.

To efficiently manage customer success, it is important to know exactly which products and features are being installed and activated, as well as, which are becoming shelfware. A powerful way to get quantitative data about product installation and activations is by leveraging a good entitlement management tool, which supports tracking when licenses are acquired and activated.

This video: Improving Product Lifecycle Performance with Software Monetization Solutions demonstrates how software licensing and purpose-built entitlement management empowers application producers to gain valuable insight into the download, installation and use of product features. This helps application producers close the loop and track their customer success in a meaningful way.

01/08/2015

As promised, I thought it would be interesting to look at the Top 10 Software Monetization Blogs of all time, some oldies but goodies. Interestingly enough, most of these blogs were among the most read in 2014 mainly because back in 2010 and 2011 when many of these blogs were originally published is when we first started talking about topics like “Subscription Licensing” and “Pay-per-Use,” but that is just what it was back then, all talk. In 2013, as well in 2014 as “Subscription Licensing” and “Pay-per-Use” became more widespread we started to see a much larger adoption of both subscription and usage-based licensing models.

While it is fun and enlightening to read through some of the older blogs and see that some predictions came true, others have not and how some are just now being realized, you can also check our more current blogs on all these topics by selecting the relevant categories i.e. Subscription Licensing or License Models for a listing of all the blogs on a specific topic.

01/02/2015

Not surprising, the number one software monetization blog topic in 2014 was the Internet of Things (#IOT). Some call it the Internet of Everything and the Industrial Internet of Things. Everywhere we turned there were news stories, opinion pieces, articles, industry reports and more on how it will change our lives. It will be interesting to see what 2015 brings and how companies capitalize on the Internet of Things to create new ecosystems and make more money.

11/20/2014

Cloud, virtualization, Internet of Things and a host of other technologies and trends impact your business significantly, including how you go to market. Our new industry benchmarking survey dives into the impact these technologies and trends have on the high tech industry and provides insight into what your peers and competition are doing to capitalize on them.

We would appreciate five minutes of your time to complete our brief survey:

Survey results will be consolidated and reported on anonymously via industry reports, which we expect to be released early next year. If you complete the survey and provide your email address, we will share the reports that are generated.

We hope we can count on you to participate. Thanks in advance for your time and consideration.

11/13/2014

Software producers often wonder whether they need a dedicated back-office application to facilitate licensing and entitlement management for the software they sell in the marketplace. This blog explains where does entitlement management fit within an application producer’s IT portfolio.

There is no denial that software entitlement management is a very specialized and complex process. If this is not managed well, it will give rise to severe revenue and customer satisfaction implications including IP leakage, license overage, and enormous service overheads. You can implement entitlement management processes in various ways:

Extend ERP, CRM or service application

Develop a ground-up homegrown application

Buy a COTS (commercial off-the-shelf) application

Entitlement management, irrespective of what implementation path you choose, is a critical, independent and integrated component in your IT application ecosystem. It deserves the rightful treatment in terms of investment and executive attention that would typically extend to a Tier I IT application.

The following illustration shows a generic Order to Entitlement process of application producers and how entitlement management plays a prominent role. Your specific scenario and IT application portfolio mix may or may not resemble this process flow.

The Order to Entitlement management process starts off in the Order Management system (CRM or ERP) where a sales order is booked when the customer buys the product. The order is transferred to the Entitlement Management application along with account and contact details, where necessary entitlements are created for customers to perform software downloads, activation and lifecycle activities. Similar information may also be transferred to the Customer Service application so that customers are registered for the service they are eligible for.

If you have a product lifecycle management (PLM) application where you maintain products and product hierarchies then you can load the product data into the entitlement management system via web services or a file based upload. Product data can be manually entered and maintained in the Entitlement Management application as well.

If your company offers usage-based or subscription-based licensing, the Entitlement management application sends usage information (in particular, entitled versus actual) to Financials application for invoicing/billing. The Customer Service application interacts very closely with the Entitlement Management application during entitlement fulfillment, and more prominently, for maintenance renewals or upgrades. In some cases, renewal information is also sent to the Order Management application for creation of service orders.

Business process flows across enterprise applications may have variations depending on your specific business requirements. By and large, the entitlement management application holds a key set of information pertinent to customer entitlements and absolutely needs tight integration with other major enterprise applications.

In short, Entitlement Management facilitates business functions similar to a conventional Supply Chain Management (SCM) software for application producers. Entitlement Management can either co-exist with your SCM application or provide basic SCM-like functionality on its own. Hence Entitlement management should be given the equivalent management focus and investment you would provide to your supply chain application. This is true whether your company is an Independent Software Vendor (ISV) or an Intelligent Device manufacturer (IDM).

Flexera Software offers world’s leading Licensing and Entitlement management solution that has evolved over several decades just like SAP or Oracle in the SCM field and encompasses industry-specific best practices from years of experience in highly specialized licensing domain.

We have published several blogs about licensing and entitlement management. Here is the list of some of the relevant blogs on these topics.